SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
Current
Report Pursuant to Section 13 or 15(d) of
The
Securities Exchange Act of 1934
Date of
Report (Date of Earliest Event Reported): February 3, 2009
Twin Disc,
Incorporated
(exact
name of registrant as specified in its charter)
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WISCONSIN
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001-7635
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39-0667110
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(State
or other jurisdiction
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(Commission
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(IRS
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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1328 Racine Street Racine,
Wisconsin 53403
(Address
of principal executive offices)
Registrant's
telephone number, including area code: (262)
638-4000
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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[
]
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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[
]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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[
]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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[
]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
7.01
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Regulation
FD Disclosure
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The
executive officers of Twin Disc intend to present materials at meetings with
investors and analysts and at investor conferences on or after February 3,
2009. A copy of the presentation materials to be used at those
meetings and from time to time thereafter is filed as Exhibit 99.1
hereto. The presentation materials will also be posted on the
Company’s website, www.twindisc.com The
Company does not intend to file any update of these presentation
materials. The fact that these presentation materials are being
furnished should not be deemed an admission as to the materiality of any
information contained in the materials.
The
information included in the presentation includes financial information
determined by methods other than in accordance with accounting principles
generally accepted in the United States of America (“GAAP”). The Company’s
management uses these non-GAAP measures in its analysis of the Company’s
performance. The Company believes that the presentation of certain non-GAAP
measures provides useful supplemental information that is essential to a proper
understanding of the operating results of the Company’s core businesses. These
non-GAAP disclosures should not be viewed as a substitute for operating results
determined in accordance with GAAP, nor are they necessarily comparable to
non-GAAP performance measures that may be presented by other
companies.
The
information in this Form 8-K being furnished under Item 7.01 shall not be deemed
to be “filed” for the purposes of Section 18 of the Securities and Exchange Act
of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of such
section, nor shall such information be deemed incorporated by reference in any
filing under the Securities Act of 1933 or the Exchange Act, except as shall be
expressly set forth by specific reference in such a filing. The presentation
contains forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements are based on the Company’s
expectations and involve risks and uncertainties that could cause the Company’s
actual results to differ materially from those set forth in the statements.
These risks are discussed in the Company’s filings with the Securities and
Exchange Commission, including an extensive discussion of these risks in the
Company’s Annual Report on Form 10-K for the year ended June 30, 2008.
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Item
9.01
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Financial
Statements and Exhibits
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(c)
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Exhibits
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EXHIBIT
NUMBER
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DESCRIPTION
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99.1
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Presentation
Materials – 2nd
Quarter Fiscal 2009.
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SIGNATURE
Pursuant
to the requirements of section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
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Date:
February 3, 2009
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Twin
Disc, Inc.
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/s/THOMAS
E. VALENTYN
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Thomas
E. Valentyn
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General
Counsel & Secretary
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21092029-1
Twin
Disc, Incorporated
WE
PUT HORSEPOWER TO WORK ™
February 3,
2009
2
Twin
Disc, Incorporated
Safe
Harbor Statement
This
presentation contains statements that are forward-looking
within the meaning of Section 21E of the Securities Exchange Act
of 1934, as amended. These statements are based on
management’s current expectations that are based on
assumptions that are subject to risks and uncertainties. Actual
results may vary because of variations between these
assumptions and actual performance. Investors are referred to
Twin Disc’s fiscal year 2008 Annual Report and Form 10-K,
“Management’s Discussion and Analysis of Financial Condition
and Results of Operations - Forward-Looking Information,” which
outlines certain risks regarding the Company’s forward-looking
statements. Copies of the Company’s SEC filings may be
obtained from the SEC, and are available on Twin Disc’s web site
(www.twindisc.com), or by request from the Investor Relations
department at the Company.
within the meaning of Section 21E of the Securities Exchange Act
of 1934, as amended. These statements are based on
management’s current expectations that are based on
assumptions that are subject to risks and uncertainties. Actual
results may vary because of variations between these
assumptions and actual performance. Investors are referred to
Twin Disc’s fiscal year 2008 Annual Report and Form 10-K,
“Management’s Discussion and Analysis of Financial Condition
and Results of Operations - Forward-Looking Information,” which
outlines certain risks regarding the Company’s forward-looking
statements. Copies of the Company’s SEC filings may be
obtained from the SEC, and are available on Twin Disc’s web site
(www.twindisc.com), or by request from the Investor Relations
department at the Company.
February 3,
2009
3
Twin
Disc, Incorporated
Manufacturing
2
1
1
#
Manufacturing
location (# of facilities in each location)
Company
owned distribution/service location
Purchasing/sourcing
offices
Twin
Disc At A Glance
• Founded in
1918
• Headquartered in
Racine, WI
• 1,000+
employees
• FY08 Revenues of
$332M
• We are a global
company
– Well-known
customers
around the world
around the world
– Mfg Operations in
the U.S.,
Italy, Belgium, Switzerland
and Japan
Italy, Belgium, Switzerland
and Japan
– World-wide
distributor
network
network
– 61% of fiscal 2008
sales to
international markets
international markets
February 3,
2009
4
Twin
Disc, Incorporated
Corporate Profile -
Market Diversity
Pleasure
Craft Market:
• Target
Markets: High speed
planing and displacement yachts
from 50’ to 150’, diesel powered
planing and displacement yachts
from 50’ to 150’, diesel powered
• Products: Transmissions,
Surface Drives, Propellers,
Steering/Thruster/Trim Systems,
Water Jets, Controls
Surface Drives, Propellers,
Steering/Thruster/Trim Systems,
Water Jets, Controls
• Channels: Engine OEMs
&
dealers, & boat builders
dealers, & boat builders
• Customers: CAT, CMD,
MAN,
MTU, Volvo / Azimuth, Baia,
Ferretti, Palmer Johnson, Riviera,
Sanlorenzo, Sunseeker
MTU, Volvo / Azimuth, Baia,
Ferretti, Palmer Johnson, Riviera,
Sanlorenzo, Sunseeker
• Competition: ZF, Reintjes
/
Kamewa /Side Power, Ultraflex
Kamewa /Side Power, Ultraflex
February 3,
2009
5
Twin
Disc, Incorporated
Corporate Profile -
Market Diversity
Work
Boat Market:
• Target
Markets: planing
and
displacement vessels from 30’ to
250’, diesel powered
displacement vessels from 30’ to
250’, diesel powered
• Products: Transmissions,
Propellers, MCD’s, Water Jets,
Controls
Propellers, MCD’s, Water Jets,
Controls
• Channels: Engine OEMs
&
dealers, boat builders &
distribution
dealers, boat builders &
distribution
• Customers: CAT,
Cummins,
IVECO, Mitsubishi, Volvo /
Damen / Sewart Supply
(operators: Secor, Tidewater)
IVECO, Mitsubishi, Volvo /
Damen / Sewart Supply
(operators: Secor, Tidewater)
• Competition: ZF, Reintjes
/
Kamewa, Hamilton
Kamewa, Hamilton
February 3,
2009
6
Twin
Disc, Incorporated
Corporate Profile -
Market Diversity
Patrol
Boat Market:
• Target
Markets: military,
patrol
and coast guard vessels from 30’
to 90’, diesel powered
and coast guard vessels from 30’
to 90’, diesel powered
• Products: Transmissions,
Surface Drives, Propellers,
Steering/Thruster/Trim Systems,
Water Jets, Controls
Surface Drives, Propellers,
Steering/Thruster/Trim Systems,
Water Jets, Controls
• Channels: Engine OEMs
&
dealers, & boat builders
dealers, & boat builders
• Customers: CAT, CMD,
MAN,
MTU, Volvo / Israeli Navy, Turkish
Coast Guard, USCG, US Navy,
RCMP
MTU, Volvo / Israeli Navy, Turkish
Coast Guard, USCG, US Navy,
RCMP
• Competition: ZF /
Kamewa
February 3,
2009
7
Twin
Disc, Incorporated
QuickShift®
Transmissions
Electronic
Controls
Bow
Thrusters
Anchor
Winches
Gangways
Trim
Tabs, Stern Thrusters
Power
Steering
Marine
Transmissions, Propulsion & Boat Management Systems
Corporate Profile -
Market Diversity
February 3,
2009
8
Twin
Disc, Incorporated
Corporate Profile -
Market Diversity
Industrial
Transmissions:
• Target
Market: Off-highway
and
all-terrain specialty vehicles,
diesel powered
all-terrain specialty vehicles,
diesel powered
• Products: Powertrain
components - - 400 to 3,000 HP
components - - 400 to 3,000 HP
• Channel: OEM
vehicle mfrs.
• Customers: BAE, Oshkosh,
Tatra
/ BJ Services, Cisco High-Lift,
Crown Energy, Enerflo, Fractec,
Trican
/ BJ Services, Cisco High-Lift,
Crown Energy, Enerflo, Fractec,
Trican
• Competitors: Allison,
ZF
February 3,
2009
9
Twin
Disc, Incorporated
Corporate Profile -
Market Diversity
Industrial
Products:
• Target
Market: Heavy
duty
industrial disconnect applications
industrial disconnect applications
• Products: Mechanical &
hydraulic
clutches, PTOs & pump mount
drives, 100 - 2,500 HP
clutches, PTOs & pump mount
drives, 100 - 2,500 HP
• Channels: Distribution
& OEMs
• Customers:
Bandit,
Morbark,
Peterson Pacific / OEM engine
dealers
Peterson Pacific / OEM engine
dealers
• Competitors:
Funk,
NACD, PT
Tech, Stiebel, Transfluid, WPT
Tech, Stiebel, Transfluid, WPT
February 3,
2009
10
Twin
Disc, Incorporated
2006
2007
2008
48%
International Sales
61%
International Sales
USA
Italy
Rest
of
World
Corporate Profile -
Geographic Diversity
February 3,
2009
11
Twin
Disc, Incorporated
What
Differentiates Us?
• Technology
– Land-Based
• 8500
Series
• “Pump &
Roll”
• “Legacy”
Contracts
• Electronic Control
Systems
• Global Distribution
and Service Network
• Product/Market &
Geographic Diversity
• Niche Market
Focus
• 90 Years of Proven
Application Know-How
• Core Manufacturing
Capabilities
– Marine
• QuickShift®
• Dynamic
Positioning
• Rolla
CFD
• Electronic/Hydraulic
Boat
Management Systems
Management Systems
February 3,
2009
12
Twin
Disc, Incorporated
Managing Our Cost
Structure
Investing in Core Competencies
Investing in Core Competencies
February 3,
2009
13
Twin
Disc, Incorporated
Lower
Cost
Low
Cost
Sourcing
Offices
Managing Our Cost
Structure
Global Sourcing
Global Sourcing
February 3,
2009
14
Twin
Disc, Incorporated
FY 2009
First Half Highlights
• Major Markets
Experience Varied Results
– Shipment and order
weakness emerged for mega yachts during second quarter
– Demand for oil and
gas transmissions continued at soft levels
– Increased shipments
and demand for industrial products continued through the
second fiscal quarter
second fiscal quarter
– Shipments of land
based transmission products for the Airport Rescue and Fire
Fighting (ARFF) and military markets were off slightly in the first half, although
backlog remained strong
Fighting (ARFF) and military markets were off slightly in the first half, although
backlog remained strong
– Commercial marine
markets continued strong and improved versus year ago levels
• Gross margins at
27.9%, down from 31.6% for FY 2008
– Impacted by
unfavorable product mix, higher material costs and increased domestic
pension expense
pension expense
• Diluted EPS of
$0.52, off record FY 2008 level of $0.81
• Six Month Backlog at
end of 2nd Fiscal Qtr >>
$106 million
February 3,
2009
15
Twin
Disc, Incorporated
$
millions
$
millions
*
See Appendix III for reconciliation of TTM (trailing 12 month) figures to
reported figures.
Net
Sales & Net Earnings
(Fiscal Year)
(Fiscal Year)
February 3,
2009
16
Twin
Disc, Incorporated
$
millions
$
millions
Net
Sales & Net Earnings
(Second Fiscal Quarter)
(Second Fiscal Quarter)
February 3,
2009
17
Twin
Disc, Incorporated
$
millions
$
millions
Net
Sales & Net Earnings
(First Fiscal Half)
(First Fiscal Half)
February 3,
2009
18
Twin
Disc, Incorporated
EBITDA
(See Appendices I & II for note on non-GAAP Financial Disclosures and a
reconciliation of net earnings to EBITDA)
(See Appendices I & II for note on non-GAAP Financial Disclosures and a
reconciliation of net earnings to EBITDA)
$
millions
%
sales
*
See Appendix III for reconciliation of TTM figures to reported
figures.
Twin
Disc, Incorporated
Looking
Ahead
February 3,
2009
20
Twin
Disc, Incorporated
FY04
FY05
FY06
FY07
$
millions
FY08
FY09
Corporate Six Month
Backlog
(Orders to be shipped in the next 6 months)
(Orders to be shipped in the next 6 months)
February 3,
2009
21
Twin
Disc, Incorporated
Fiscal
Year 2009/10 Outlook
• Cautious outlook in
face of global turmoil
• Certain key markets
will experience weakness
– Oil and gas and mega
yacht markets softness expected to
continue into next fiscal year
continue into next fiscal year
• Other key markets
expected to remain stable
– Commercial marine,
military and airport firefighting and
rescue markets will continue stable
rescue markets will continue stable
• Continue to control
global spending
– Reduced FY 2009
CAPEX forecast to $10-$12 million, down
from prior estimate of $15-$17 million
from prior estimate of $15-$17 million
February 3,
2009
22
Twin
Disc, Incorporated
Fiscal
Year 2009/10 Outlook
• Technology
differentiation/new products
• Opportunity for
operating leverage continues
– Expanding global
outsourcing
– Investing in core
competencies
• Active Acquisition
Program
• Active stock buyback
program (Board
authorized repurchase of up to an additional
250,000 shares)
authorized repurchase of up to an additional
250,000 shares)
Twin
Disc, Incorporated
WE
PUT HORSEPOWER TO WORK ™
Twin
Disc, Incorporated
Appendices
February 3,
2009
25
Twin
Disc, Incorporated
Non-GAAP
Financial Disclosures
Financial
information excluding the impact of certain significant items in this
presentation are not measures that
are defined in U.S. Generally Accepted Accounting Principles (“GAAP”). These items are measures that
management believes are important to adjust for in order to have a meaningful comparison to prior and future
periods and to provide a basis for future projections and for estimating our earnings growth prospects. Non-
GAAP measures are used by management as a performance measure to judge profitability of our business
absent the impact of foreign currency exchange rate changes and acquisitions. Management analyzes the
company’s business performance and trends excluding these amounts. These measures, as well as EBITDA,
provide a more consistent view of performance than the closest GAAP equivalent for management and
investors. Management compensates for this by using these measures in combination with the GAAP
measures. The presentation of the non-GAAP measures in this presentation are made alongside the most
directly comparable GAAP measures.
are defined in U.S. Generally Accepted Accounting Principles (“GAAP”). These items are measures that
management believes are important to adjust for in order to have a meaningful comparison to prior and future
periods and to provide a basis for future projections and for estimating our earnings growth prospects. Non-
GAAP measures are used by management as a performance measure to judge profitability of our business
absent the impact of foreign currency exchange rate changes and acquisitions. Management analyzes the
company’s business performance and trends excluding these amounts. These measures, as well as EBITDA,
provide a more consistent view of performance than the closest GAAP equivalent for management and
investors. Management compensates for this by using these measures in combination with the GAAP
measures. The presentation of the non-GAAP measures in this presentation are made alongside the most
directly comparable GAAP measures.
Definition
- - Earnings Before Interest, Taxes, Depreciation and Amortization
(EBITDA)
The sum
of, net earnings and adding back provision for income taxes, interest expense,
depreciations and
amortization expenses: this is a financial measure of the profit generated excluding the above mentioned
items.
amortization expenses: this is a financial measure of the profit generated excluding the above mentioned
items.
Appendix
I
Non-GAAP Financial Disclosures
Non-GAAP Financial Disclosures
February 3,
2009
26
Twin
Disc, Incorporated
*
See Appendix III for reconciliation of TTM figures to reported
figures.
Appendix
II
Reconciliation of Net Earnings to EBITDA
Reconciliation of Net Earnings to EBITDA
February 3,
2009
27
Twin
Disc, Incorporated
Appendix
III
Reconciliation of TTM Data to Reported Quarterly Figures
Reconciliation of TTM Data to Reported Quarterly Figures
February 3,
2009
28
Twin
Disc, Incorporated
Appendix
IV
Fiscal Year Condensed Consolidated Statements of Operations
Fiscal Year Condensed Consolidated Statements of Operations
February 3,
2009
29
Twin
Disc, Incorporated
Appendix
VI
2nd Fiscal Quarter Condensed Consolidated Statements of Operations
2nd Fiscal Quarter Condensed Consolidated Statements of Operations
February 3,
2009
30
Twin
Disc, Incorporated
$243
$219
$186
$317
$332
Appendix
VI
Net Sales by Segment
Net Sales by Segment
February 3,
2009
31
Twin
Disc, Incorporated
Appendix
VII
Net Earnings by Segment (before Corporate Expense)
Net Earnings by Segment (before Corporate Expense)
February 3,
2009
32
Twin
Disc, Incorporated
$
millions
%
sales
Appendix
VIII
Operating Cash Flows
Operating Cash Flows
Twin
Disc, Incorporated
WE
PUT HORSEPOWER TO WORK ™